re: Options Trading Thread

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The optimization, tax implications and chaining together the sales replenishing exercised shares, not so much.

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Which platform do you use? At least on TD Ameritrade, you can identify specific lots using the FIFO (first in, first out) or LIFO identifiers. And you can change them, as you need to. I do that ahead of time to see what my cost basis is on various lots.

But yes, I see what you’re saying. Short options typically generate short term gains. As for optimizing, on more complex strategies, I employ deltas and IV as the primary basis… and of course balancing risk/reward. On covered calls, it really just comes down to what strike you’d be content to let the stock go, should the option go in the money. Option price will just be a function of underlying price vs strike, time and IV (for the most part) and the other Greek bros.

But please don’t think that I’m encouraging you, or anyone, to go into an area where you wouldn’t be comfortable. Just throwing out an idea for possible exploration.